| That week was fraught, as it was the week of a major conference that we were working with. It was the first time we were displaying adverts on someone else’s site through our system, but we couldn’t trust Simon — we had no guarantee that he wouldn’t try and display something malicious. We had to rebuild the ad system from scratch to ensure that no one could maliciously inject adverts onto our system. It was too much of a risk to leave it in the control of Simon. Once we got control over the ad system we realised that the adverts were affiliate links, i.e. not unique to us. The companies advertising had no idea they were advertising on our site. We had no relationship with them. It slowly dawned on us that the financial forecasts we were basing the raise on were useless. It was based on information from Simon on adverts that were not real, and deals that did not exist. The financial model was broken. I'm sorry but ... what? They ran a company for "a couple years" with at least a handful of staff, and let this one guy come in and overnight effectively take over an utterly critical part of the business even though "He hasn’t paid any of his invoices. We were expecting around £25k from him" And then they depend on the same individual both to finance and to provide the financial forecasts justifying their must-have funding round, and after it blows up they say "we didn’t see it coming" |
I respect the author's transparency but there are a huge number of lessons to be learned here before jumping head first in to any other new business startup that relies on other people's money to launch.